This morning corn is up 3 and soybeans are up 18 to start the day.
The initial response to yesterday’s report was very bullish as futures traded 30+ higher for a while, but eventually settled 14 higher. The report was bullish, but with traders holding long positions heading into the report it made closing significantly higher a challenge. The USDA lowered yield by 5 bpa in yesterdays report which was the shock that moved the market. Their July estimate had corn at 179.5 bpa which most felt was too high. In yesterdays report they pegged it at 174.6 bpa which most now feel is too low. I would expect this year’s crop comes in closer to 177-178 range when we get the final numbers in January. This should keep pressure on the markets and prevent new crop from running significantly higher in the next couple months.
The FSA yield data was released yesterday afternoon and there were more corn acres reported. If the USDA would adjust their number and follow the FSA(which is the actual planted acres), we could see 500,000 to 1.0 million more corn acres as there was very little prevent plant noted. This could dramatically shift the balance sheet and increase carryout by 85-175 million bushels.
Old crop basis levels have plummeted across the country as end users become covered. As I stated yesterday, anyone holding old crop corn should get things moved ASAP.
Here are yesterday’s USDA numbers:
2021/22 USDA Yield (Bu/acre)
2021/22 USDA Production (bln bu)
2020/21 USDA Carryout (bln bu)
2021/22 USDA Carryout (bln bu)
Have a Safe Day!